Toubani’s DFS update to put even more shine on its already attractive Kobada gold project
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Toubani has formally launched an update of its 2021 Kobada DFS to optimise both the oxide and fresh rock project phases while assessing the potential for higher production rates.
As it stands, the project is already an attractive preposition with substantial investment made by the previous management defining a 3.1Moz resource – including 1.71Moz in the higher confidence Measured and Indicated categories – and completing a Definitive Feasibility Study that outlined truly competitive economics.
The study defined a +100,000oz per annum operation at US$972 ($1,456) per oz all-in sustaining cost over the first 10 years, delivering a pre-tax net present value and internal rate of return (both measures of profitability) of $US506m and 45% respectively.
Any company would be pleased with these figures but Toubani Resources (ASX:TRE) is confident that it can do better in its quest to set Kobada on the path towards becoming West Africa’s next gold mine of scale and has launched the DFS update as its vehicle to achieve this goal.
Central to these plans are the substantive initial oxide phase operation at the project, which the company believes could be the subject of a bulk tonnage oxide mining and processing operation that will lower its overall technical risk profile.
This also offers the opportunity for increased annual gold production with the oxide project phase followed by the inclusion of fresh material later in the mine plan.
Optimisation of the DFS will also include the significant stockpile balances built over the first 10 years of the 2021 DFS mine plan.
“We are excited to commence the DFS Update workstream as we believe the full potential of Kobada as the next West African gold mine of scale has yet to materialise,” chief executive officer Phil Russo said.
“The DFS Update will pursue the potential for the project to be optimised to a throughput level that more aptly supports a bulk mining and lower overall technical risk approach, which is further strengthened when considering the significant existing resources of oxide, free-digging material at Kobada.
“We believe Kobada has all the attributes to distinguish itself from its other West African development peers, being free milling ore, a large oxide resource with attractive fresh rock optionality, while also permitted.
“We look forward to completing the update to the DFS later this year to aim to demonstrate the robustness and lower overall risk profile that a larger Kobada project could deliver.”
Further highlighting this belief, new non-executive director Mark Strizek – who recently guided Tietto Minerals from IPO to first gold – believes that it is easily possible to take production up to 150,000ozpa. Read Reuben Adams’ Q&A with Strizek here.
The DFS Update will focus on a range of development scenarios to analyse the impact of different mining and processing rates on operating costs, capital costs and the financial performance of the project.
Whilst the original DFS contemplated a processing plant with a 3Mtpa throughput rate, with mining rates averaging 24Mtpa to enable a higher-grade feed in years 1 to 10, the update will focus on a range of higher processing plant throughputs, with mining schedules updated to match these processing rates.
This will assess whether this range of throughputs can be achieved without significant changes to the mining rates contemplated in the 2021 DFS, which would have resulted in significantly more ore mined than processed in the first 10 years due to the low strip ratio, while using achievable mining productivities and consistent material movements for a project of this scale.
Toubani will\ also investigate the potential for mine scheduling using typical mining fleets seen in similar gold mining operations in West Africa, including different and larger configurations of equipment, to achieve more efficient material movements and potential cost economies.
Other considerations include whether changes to the pit stage layout and scheduling sequence has the potential to deliver sufficient material to meet larger throughput scenarios, while maintaining a meaningful project life.
The company believes that the overall technical and geological risk profile of Kobada could be reduced significantly using a bulk tonnage oxide mining scenario with the potential economics of a larger processing plant and increased annual production benefitting the project overall.
As such, the update will focus on maximising and de-risking the oxide mining and processing phase.
To help achieve this, it will complete targeted drilling in key areas as well as update the geological model to upgrade current Inferred Resources located within the current open pit.
Additionally, the company will further investigate the optimal inclusion and implementation of the fresh rock mineralisation into a reoptimised Kobada as it remains a major opportunity for the project.
Potential for mineralisation recently delineated at satellite prospects such as Gosso and Kobada West to be included in the project pipeline will also be investigated with resource delineation drilling at these prospects able to be scheduled for the second half of 2023.
Further metallurgical testwork is likely to be conducted on potential new sources of plant feed including the Kobada extensions at Kobada North, Foroko and Kobada South, Kobada West, Gosso and Kobada East.
The DFS Update is expected to be completed by the end of 2023.
This article was developed in collaboration with Toubani Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.